The principal question in this case, arises upon the rejection of a portion of the deposition of David G. Fuller, the payee and indorser of the note. His testimony was offered by the defendant, to show the note void in its inception, as having been given on the sale of spirituous liquors in the state of New Hampshire, by this witness, and without any license therefor, such sale being unlawful under the laws of that state. This testimony was rejected by the court, as being incompetent to prove the note-originally void.

It is not pretended that the witness has any interest in the event of this suit, or that he is otherwise incompetent, except from having indorsed, and thereby having become a party to the note. And upon the authority of Walton v. Shelby, 1 T. Rep. 269, and various other cases adopting the principle of that case, it is urged that his testimony for that purpose, should not be received, “ on “ the ground that no man shall be permitted to invalidate an in- “ strument, by his testimony, to which he had set his hand.” A different principle was afterwards adopted in England, by the cases of Bent v. Baker, 3 T. Rep. 27, and Jordaine v. Lashbrook, 7 T. Rep 601, in which it was held that witnesses so situated, were competent to testify in the case, though their relation to the note- was a proper subject for consideration, as affecting their credibility. The principle of these cases respectively, has been too much the subject of investigation in the English courts, as well as this country, to render it necessary, or of practical importance, to enter into an investigation of the subject, any farther than to- ascertain and state the general result of the authorities on this question.

*463In England the question has been considered as settled by the case of Jordaine v. Lashbrook, and since that decision the rule has been uniform, “ that the party to any instrument, whether nego- “ tiable or not, is a competent witness to prove any fact to which “ any other witness would be competent to testify, provided he is “not shown to be legally infamous, and is not directly interested in “ the event of the suit,” and this rule is of general application, except it be in the case of public officers, who are not permitted to falsify statements and certificates, given in their official capacity. I Phil. Evid. 42, and note 78. 1 Greenleaf Evid. § 384. In 2 Smith’s notes to leading cases 50, margin, it is said, “that the “courts ever since the case of Bent v. Baker, have evinced a “ laudable desire to let in truth wherever precedent will admit it, “ by holding objections to apply rather to the credit than the com- “ petency of the witnesses.” This rule, so uniformly adopted in England, was, upon mature consideration, adopted in this state, in the case of Nichols v. Holgate, 2 Aik. Rep. 138. The authority of that case, was afterwards indirectly questioned in the case of Chandler v. Mason, 2 Vt. 198. But we are unanimously of the opinion, upon this investigation of the subject, that the case of Nichols v. Roígate, was well considered and correctly decided, and that the principle of that case should not be departed from. For it was properly observed in that case, “ that more evil is experi- “ enced from shutting out testimony entitled to credit, than would “ be prevented by seeking for new causes for its exclusion.” This rule has now become the settled law in New York. 8 Cow. Rep. 673. 3 Wend. Rep. 416. In Conn., 1 Con. Rep. 260, 13 Con. Rep. 360. In N. Jersey, 2 Haz. 192. 2 Pen. Rep. 791. In 10 N. H. Rep. 180. Also in Maryland, Yirginia, S. Carolina, Georgia, Tennessee, and some other states.

The doctrine of Walton v. Shelby, is, however, followed by the supreme court of the U. States, and by the courts of Massachusetts, Maine, Pennsylvania, and Ohio. The practical effect of that doctrine, has, however, led to that modification of the principle that it is now regarded as a mere rule of Commercial law, intended for the security of trade, and restricted to negotiable instruments. 11 Peters Rep. 95. 9 Met. Rep. 471. 4 W. & Sergt. 128. 3 How. Rep. 73. In all other cases, an¡J, in other instruments, the rule as settled in Jordaine v. Lashbrook, has its application.

*464And in the case of mercantile paper, the courts adopting the rule of Walton v. Shelby, have limited its application, by requiring that the instrument be actually negotiated, and under circumstances freeing it from antecedent equities. When, therefore, a note is endorsed after it reaches maturity, the endorser, payee, or maker, is a competent witness, on the ground of policy, and can not be shut out, except on the ground of interest. 11 Pick. Rep. 417. 2 Met. Rep. 289. 18 Ohio 579. 4 S. & Rawle 399. 2 Smith’s Lead. Cas. 127.

In the application of these principles to this case, it will at once be perceived, that the part of this deposition which was rejected, ought to have been received and read to the jury. It was clearly admissible upon the authority of the case of Nichols V. Holgate, and as this note was transferred nearly two years overdue, the testimony could not be excluded upon those authorities, adopting the principle held in Walton v. Shelby.

The court admitted the witness to testify to the payment of the note, and from which we learn, that when the note was given, an account existed in favor of the defendant against the payee, and that it was then understood that the amount was to be deducted from the note. This, with the sums paid on the note before it was transferred, was, as the witness testifies, more than sufficient to balance it. These facts being found, it becomes a question of law whether they constitute a legal defense. The court decided that this did not constitute a payment or defense, and rendered judgment for the plaintiff for the amount of the noté. In this, also, we think there was error. In the case of Walbridge v. Kibbee, 20 Vt. 543, in a case very similar to the present, it was held, that the note was subject to any defense which grew out of the note transaction, or out of any agreement between the maker and the payee in relation to it before its transfer. In that case there was an agreement to apply the balance on book account, in payment of the note, and as the plaintiff purchased the note after it fell due, the agreement was held a good defense. The case seems to be decisive of the present action, and on both grounds we think the judgment of the county court must be reversed.